HUMMONEYhttp://www.humnews.com/money/Wed, 29 Feb 2012 21:22:20 +0000en-USSquarespace V5 Site Server v5.13.333-91 (http://www.squarespace.com)World Bank President challenged by angry Beijing protestor1%99%BeijingChinaMain StreetOccupyRobert ZoellickUnited StatesWall StreetWorld BankHUMNEWSWed, 29 Feb 2012 17:24:51 +0000http://www.humnews.com/money/2012/2/29/world-bank-president-challenged-by-angry-beijing-protestor.html519024:9439840:15240840(PHOTO: WB President Robert Zoellick/THE HINDU) The President of the World Bank was challenged during his presentation of the "China 2030" dossier today. As reported on agichina24.it, a few minutes after the start of the news conference, the "independent researcher" stood up to hand a brief note to Robert Zoellick & then started yelling about the World Bank. The man shouted words to the effect that the World Bank carries no guarantees for the Chinese people & will damage China's interests; saying "China does not want to end up like the United States" & "Wall Street Bankers are cheats & parasites. They have damaged the US and now they want to ruin China." (Read More @ AGI.IT) ]]>http://www.humnews.com/money/rss-comments-entry-15240840.xmlAre You Ready For One of the Biggest Changes on the Internet in a Decade? (PERSPECTIVE)ICANNTLDSinternetHUMNEWSWed, 02 Nov 2011 06:05:28 +0000http://www.humnews.com/money/2011/11/2/are-you-ready-for-one-of-the-biggest-changes-on-the-internet.html519024:9439840:13561667By Judy Shapiro

ICANN's New Generic Top-Level Domain Program is just about to kick off and I bet most of you are wondering what the heck those are anyway (don't feel bad if you don't know – neither did I until recently). Then, you are also probably wondering why you should care.

First, the basics. A "generic top-level domain" is the part of the domain name to the right of the dot, e.g. in "http://www.ICANN.org" - the "org" is the top-level domain (TLD). There are 22 generic TLDs (gTLDs) such as .COM, .ORG and .NET, and around 250 country-code TLDs (ccTLDs) that are specific to certain countries, like .JP for Japan and .MX for Mexico.

With ICANNs New gTLD Program to commence January 2012, the doors will be thrown wide open and virtually any word can become a gTLD if the company or organization meets certain criteria:

They can pony up the hefty application fee ($185,000)

They can prove they can afford to run a gTLD year after year

They can justify why they should own a particular word as a gTLD – e.g. a travel company is unlikely to be successful at justifying buying ".Apple" as a gTLD but they can justify buying "adventure"

If a company can meet these criteria - then congratulations – they've just become a registry. Amazon can buy ".books" and JetBlue can buy ".fly". And if two companies want the same word and can't reach an agreement on their own, an auction commences with the word going to the highest bidder.

The application process itself also has significant impacts because, by default or design, it seems optimized to drive a gTLD land grab within a very short, four month time frame. All applications are closed and not publically disclosed until after the brief application period is over (on April 12, 2012). With no assurances of another application period, many companies will feel compelled to take advantage of this possible 1x only event.

As to the "so what" of all this - well - there's a long list:

From an industry perspective: The leading marketing trade organizations like the ANA and IAB have been vocal and consistent critics of this initiative. Other critics have questioned the motives of former ICANN members who voted this initiative through and who subsequently left ICANN to start or join companies that sold gTLDs.

From a marketer's perspective (and their agencies): Here's the bad news. If you're at a Fortune 300 company, it is likely your IT/ legal department will advise you to purchase multiple (possibly a dozen) gTLDs.

Now even if you manage to avoid getting hit directly with that cost (for now), you will still have to spend a hefty chuck trying to figure out what to do with these new "marketing assets." Unquestionably, there will be many [expensive] experiments to explore useful applications of gTLDs - from SEO optimization to new types of customization programs, e.g. personalized "judyconsumer.books" URLs for a highly customized experience.

In the end, it's likely you may have to redirect active program dollars into this experimental space. This adds yet another layer of complication to an increasingly complicated marketing environment.

From a consumer's perspective: Just when we thought it was kinda safe to go into Internet waters because we had a basic understanding of what a safe URL should look like … now anything's possible. With hundreds of new gTLDs likely to be introduced starting next year, consumer confusion is virtually guaranteed. There's little doubt fraudsters intend to exploit this new window of vulnerability.

From an emerging country or company perspective: The stakes get even grimmer for an emerging company or country. If you don't/ can't qualify today – chances are you are locked out for a very long time – maybe forever.

Now you can see why there is a lot at stake. Yet, when I spoke to my IT and marketing peers at the largest companies, there was a near universal lack of information on this topic! So somewhat spontaneously (driven by timing urgency) and with the help of CADNA (the not-for-profit Coalition Against Domain Name Abuse), I helped create an industry conference called "What's At Stake" for November 1 in NYC that is open (free) to ANY brand marketer needing to understand this space. The conference was created as an industry service and includes keynote speaker Esther Dyson, founding Chairman of ICANN, HUM News, FairWinds Partners and Friends of the U.N. among others.

The goal for this discovery conference is to drive a productive change to the current process by presenting a balanced view of the new gTLD Program with an emphasis on exploring the impacts, and proposing to ICANN alternate processes we believe are not too late to implement (read full recommendation to ICANN here).

There's a lot at stake for marketers and consumers globally. Find out more about the coming changes to the internet at www.whatsatstake.com.

About the author: Judy Shapiro is CEO of engageSimply, a digital marketing agency pioneering `Many to Many’ platforms; chief brand strategist at CloudLinux and has held senior marketing positions at Paltalk, Comodo, Computer Associates, Lucent Technologies, AT&T and Bell Labs. Her blog, Trench Wars, provides insights on how to create business value on the internet.

(São Paulo, August 12, 2011) – Minister of Planning, Miriam Belchior, says that the international economic crisis that affects the United States and some countries in Europe will not mean alterations in planned investments in the Accelerated Growth Program (“PAC”). Belchior declared that the government does not intend to make changes in decisions already made for PAC spending, “under any circumstances."

The PAC is the Brazilian government’s showcase development program that began during the Luiz Inacio Lula da Silva administration. The second stage, which continues under Dilma Rousseff, and runs to 2014, has a budget of R$ 955 billion, explained Belchior.

“These are fundamental investments. Among other things, they will help us ward off problems from the international economic crisis,” said Belchior, as she assured an audience at a construction conference in São Paulo that planned 2011 outlays for the low-income housing program (“Minha Casa, Minha Vida”) of R$30 billion would occur.

Belchior declared that even though the PAC would move ahead unchanged the government was well aware of what was going on in the rest of the world. “We are concerned, but well prepared to deal with the situation, just as we did in 2008,” the minister said, referring to the US mortgage bubble of 2008. “We are closely following events on the international scene in order to determine whether or not other measures will be necessary.”

Euros PHOTO CREDIT: Fernando D. Ramirez/flickrFor the last 18 months, the euro has been in trouble. There have been a series of emergency meetings, crisis summits and rescue attempts but still the stench of death hangs around the currency. Its future should become clearer in the next month or so.

Just two weeks ago, eurozone leaders were patting themselves on the back for creating the European Financial Stability Facility, a mechanism to help countries who found borrowing on the open markets much too expensive. The problem is that Italy is now in trouble and the EFSF simply is not big enough to bail out the world’s eighth largest economy.

Italy has been in trouble for a while – but things started to get substantially worse in June when its credit rating was put on watch by global credit agencies. Slowly the cost of borrowing ticked up. Italy refused to do much about it. Panic spread. The cost of bonds hit a 14-year high of 6.189 per cent, which essentially means Italy was shut out of the international financial markets.

At that point Italian Prime Minister Silvio Berlusconi finally took action. He announced a round of austerity measures – spending cuts and tax rises – and brought forward the date when Italy’s budget would be balanced to 2013.

That was enough to secure support from the European Central Bank. It announced it would step into the market on Monday and buy up some of the debts of countries that were struggling, steadying the markets in the short term at least. It did, however, leave the impression that the ECB was dictating policy in exchange for financial support.

Four of the 23 ECB governing council members – including the key vote of the German Central Bank chief – are against bond purchases.

And it’s divisions like that which have been exploited by the markets.

The options for the euro are now becoming clearer.

First the countries backing the EFSF can pour more money into it. It is expected to have a fund of around $630bn but it needs around $2.8 trillion if it’s to cover the debts of Italy and Spain, which is also considered at risk. That is thought to be unpopular and unlikely.

Or there can be full fiscal integration across the eurozone. The euro was always a political project rather than a financial one. Full integration would mean a centralised financial policy implemented across the continent, a loss of sovereignty over financial matters for many capitals and in the current climate, severe austerity measures which would be deeply unpopular.

This would create a new European finance ministry and as the strongest economy, Germany would have to pour huge financial resources into it and give it enough clout to guarantee the debts of eurozone countries. Getting all 17 members of the eurozone to sign up to that seems highly problematical.

Another alternative is scrapping the Euro altogether. That would be extremely expensive and have huge implications for the banking sector which has massive exposure to eurozone debts. A huge injection of funds would be needed to stop a run on the banks. Some analysts believe the Germans regard this as the less expensive long-term option.

For 18 months, every decision taken to safeguard the euro has been largely a political one as leaders and finance ministers try to decide how far they can go without losing massive support at home. And that had led to fears about Europe’s ability to get ahead of the crisis and deal with it rather than react to events. It’s become known as "kicking the can down the road".

The austerity cuts, so beloved by central bankers and financial institutions, almost always mean higher taxes, a more expensive cost of living, poorer public services and job losses; millions of job losses. That hits the prospect of growth in economies, which in turn generates fears of recession or depression. Macro economics is about large numbers and large concepts – and it’s easy to forget it affects real people and real lives.

I never thought I would stand in a battery-chicken farm and think, what impressive progress!.

But however unpleasant for the birds - cooped up, two to a shoe-box sized wire cage - its owners show off the Railaco farm with pride.

Its eggs are replacing ones that would otherwise have been brought in from abroad; it employs people and operates for profit. It is an East Timorese business success story.

They are becoming more common. Tony Jape - East Timorese but of Chinese descent and fresh from a fortune made as an émigré in Australia - is building the country’s first ever shopping centre.

Though still not quite finished, it is, he says, already 60 per cent let. And Timor Corp - one of the country’s two big coffee producers - is proud it exports beans right around the world.

These are little examples of a country whose economy is flying: a poor place, recently ravaged by conflict, it now has one of the fastest growing economies in the world.

But the pace of growth is controversial. Examples of private enterprise are the exceptions, not the rule.

The boom is mainly publicly funded, and is only possible because of big oil and gas reserves. A government that had a budget of just $68m in 2002 has $1.3bn to lavish this year.

Having spent a decade being frugal - building up $9bn in the national bank account - they’re now beginning to spend, spend, spend.

There are two motivations.

First, the still-pressing needs of the country. Half the children in East Timor are undersize because they are malnourished; diarrhea remains a big killer.

And in most rural provinces, running water and power are rare.

So, tapping into the fund, Xanana Gusmao, the prime minster, has started the biggest single development project in East Timor’s history: bringing electricity to all.

The second motivation is that the money sitting in the bank or invested in questionable assets is no longer growing at rates it once was.

As President Ramos-Horta told me, “It would be silly - silly - to keep the money in US treasury bonds. The dollar is depreciating fast. We are losing money. And President Obama, members of the US congress, they do not even know that we are contributing to pay for the US debt.

“So it is absolutely ridiculous that we would keep the money in US treasury bonds, paying us 2-3 per cent; once you deduct inflation, depreciation of the dollar, we are losing!”

I have just spent 10 days in East Timor, in advance of elections next year and the tenth anniversary of independence.

I was making four reports for Al Jazeera which, together paint a picture of the state of the tiny nation.

Ostensibly, each report stands alone:

1- One about whether there should be justice or an amnesty for those indicted by the UN for their part in 1999’s violence;

2- Another about the wisdom of spending down the oil fund;

3- A third about the threat to the marine environment as the country matures and;

4- A fourth looking about the extent to which foreign aid has been well-spent.

All the reports, though, have the theme of rapid development at their heart. Should a friendly economic relationship with Indonesia be prioritised above justice?

What will happen when the oil and gas and their revenues run out? Are damaged coral reefs a price worth paying for power? Can a country that has relied on foreign aid for a decade, now truly stand on its own two feet?

Peace has been a struggle for East Timor. There was a relapse of violence in 2006 and the president was shot in 2008.

Today, the country is entirely peaceful, and a very relaxed place to visit. That, though, could change. Keeping the economy on the straight and narrow is key to ensuring it does not.

How do multinational corporations today develop their leadership and team-building skills in a globalized world? How can they ensure that their employees have a global view and a deep understanding of new markets? And how, in the face of cost-cutting measures, do you maintain your company’s commitments to creating sustainable value as the market now requires?

One innovation that has gained real momentum over the past couple of years is International Corporate Volunteerism (ICV). Companies as diverse in size and scope as IBM, Pfizer, Pepsi, Dow Corning, FedEx and Deloitte are tapping into the skills, the spirit of volunteerism and the desire of their employees to learn more about emerging markets and global engagement. These corporate giants work withnonprofit partners such as CDC Development Solutions to place top-performing professionals in ICV programs that develop leadership skills, increase cultural intelligence and offer a broader view of business practices, while at the same time providing assistance to local social enterprises and nonprofits so that they might better serve their communities and contribute to economic growth.

In a recent article inEmployee Benefit News, the IBM Corporate Service Corps (CSC) experience was described as “life-changing” by a program alum:

"It's a leadership development exercise besides being a corporate social responsibility program. It was like a 30-day intensive MBA course in the real world outside our comfort zone in the U.S.," explains Tim Willeford, global communications lead for IBM, and a past participant of the program facilitated by CDC Development Solutions. "It was a life-changing experience. I think we come back with the bigger view and also the hunger to do more and become a global citizen."

Stanley Litow, President of IBM International Foundation, described the multifaceted benefits of the IBM program in a June 3 Huffington Post article:

Aside from helping local governments and citizens looking to improve societal, civic and free market institutions, employees that render service to these places come back with renewed cultural sensitivity, leadership skills, professional acumen and improved collaboration savvy. They tend to feel more fulfilled and develop deeper loyalty to their employer. And, of course, these folks can give valuable insight to the company about new commercial opportunities.

In a CDC Development Solutions’ survey of employees at three corporations who piloted their international corporate volunteerism programs in the Fall of 2010, 97% responded that they were more motivated to perform their day-job, 94% said their experience positively changed their perception of their company as a corporate citizen and 75% said they brought back new ideas for products and services. According to a recent benchmarking study we conducted, major corporations plan to send nearly 2,000 employee volunteers to 58 nations this year, up from just 280 to a handful of countries in 2006.

It is clear that more and more companies are seeing great benefit in engaging in these types of programs. But what is the real development impact and leave behind in the communities where these corporate volunteers serve? Certainly I have heard people question the value that can be delivered to the host community over periods that may be as short as one month; my experience having been on the ground with a dozen or so of these teams personally, and having heard from the skilled development professionals that are on the ground with each and every team, is that these programs are invaluable to the host organizations and communities.

In Ghana, for example, IBM partners with small businesses and trade associations to ensure readiness to supply goods and services to the burgeoning new oil and gas industry. This is a critical time period to ensure that Ghanaians can directly benefit from the opportunities presented by the nascent industry, and IBM teams have helped small businesses understand and work to meet the requirements to participate. IBM also has sent several CSC teams to Cross River State, where several volunteers worked with local government and NGOs to help a local health clinic to computerize records and create databases, improving its efficiency. Today, pregnant women and young children in Cross River State have better access to health care and the clinic is able to do more effective outreach to people that are eligible for its services.

Last fall, Dow Corning sent a team to Bangalore, India. When that team of 10 communicated the challenges they were facing to their fellow employees on a company blog, scientists, engineers and welders from Midland, Michigan sent back potential solutions for their colleagues, bringing the expertise of not just 10, but 10,000 employees to their Bangalore partners. In fact, it was a welding solution that solved a critical design problem that had been plaguing the host social enterprise since it began to produce clean cook stoves.

Examples like these are beginning to show that ICV programs can be highly impactful, not just for the companies and volunteers, but even more so for the communities that need are in dire need of this type assistance. The host NGOs, social enterprises, small businesses and local governments would be unlikely to have access to such skilled resources through any other means. Recognizing the potential for significant development impact, just two weeks ago, the U.S. Agency for International Development unveileda programto make it easier for more companies of all sizes to send professionals abroad to help local governments, small businesses and civic groups in developing nations. The new Center of Excellence for International Corporate Volunteerism was developed with IBM and CDC Development Solutions and is designed to allow other companies to leverage the expertise of IBM and others to set up or expand international volunteer programs.

In aMSNBC articleabout the partnership, Samuel A. Worthington, president and CEO of InterAction, an alliance of 190 U.S.-based international nongovernmental organizations (NGO) commented on the partnership:

The reality is that to be able to achieve Millennium Development Goals — to improve the well-being in the poorest places on Earth — requires a partnership of government, corporations and non-profits...With individuals going into long-term projects, you are in essence getting a private Peace Corps, and the technical expertise that comes with it, and increased mutual understanding between two countries.

The USAID partnership will offer structure and training needed to make sure volunteers also seen as citizen-diplomats are aware of cultural sensitivities while delivering help, Worthington said.

Also commenting on this new opportunity to attract more businesses to offer their most talented employees to take on development challenges, John Campbell shared these thoughts in a Council of Foreign Relations blog:

In an era of very tight federal budgets and slow American economic recovery, this public-private partnership deserves to be better known. It has the potential for mobilizing millions of dollars worth of expertise for development assistance from the American private sector and at virtually no additional cost to the taxpayer. Such corporate initiatives may also have the added advantage of being exceptionally nimble, so they can respond easily to specific circumstances in the countries where they are working.

And while we have both empirical and anecdotal evidence that demonstrates the immediate value to companies, individuals and host communities, one thing we have not yet been able to capture because this type of programming is so relatively new, is the influence the experience has on the way these future leaders of the corporate world will engage with the society. According to Edward Colbert, director of talent management at Dow Corning:

“These employees return as different people, deeper thinking people, people that have stretched their brains and hearts, opened their eyes and figured out solutions to problems that they likely had never thought of before.”

I am an idealist, yes. But given what we already know about the effects of the ICV experience on those who have participated, even my highly practical side is prepared to predict that as these individuals take over the leadership of their corporations in the coming years, they will lead with a passion to reinvent business engagement and focus on building sustainable value: creating a better world while creating a better company. What could possibly be more impactful?

Deirdre White is president and chief executive of CDC Development Solutions (CDS), a nonprofit providing market-driven solutions that empower individuals, businesses, and governments in emerging markets to lead economies towards self-sustained growth and opportunity.

(Courtesy: RiskIntegrityManagement.com) There was a wonderful commencement speech given by Charles S. Sanford, Jr., the former Chairman and CEO at Bankers Trust, at the University of Georgia. Using a 2500 year old thought by the Greek philosopher, Heraclitus, “Nothing endures but change,” he went on to challenge the students’ conventional notions of risk. For me his illuminating message was captured in the following lines, “… in a world of constant change, risk is actually a form of safety, because it accepts that world for what it is. Conventional safety is where the danger lies, because it denies and resists that world.”

I want to say this one more time: risk is a form of safety. This idea is so unconventional and powerful that everyone should sit and think about it for a moment. Although this could potentially impact your life on so many levels, let’s distill the question for its investment relevance and examine how we could apply this wisdom.

On the most basic level it could possibly suggest that doing nothing could be incredibly risky. Let’s examine. If you decide to just leave your money in cash because you are afraid, you are relegating yourself to no growth and possible loss of principle when inflation is factored in. This may be acceptable to some but what if you actually need your savings to grow to meet your needs at retirement? Or perhaps changes in your health or employment circumstance could require larger capital reserves than you currently have. In this case the decision to not seek growth could prove costly. This is not an exercise to scare, rather an exercise to help you appreciate what risks you may actually be taking when you think you are taking no risk at all. To take another example, municipal bonds are generally considered safe, not just because they have the local authority to tax but because they come with the implicit protection of the federal government. Given the horrific financial circumstances of state and local governments and the federal government, are these assurances sufficient? Lastly, is the advice you’re getting adapting to the changing world sufficiently to manage risk?

This is just one example to a most complex problem of reexamining your fundamental views. It is my intention to just challenge your thinking. For in these very difficult times change will be constant and if we fail to evolve our perceptions of risk, safety will be hard to come by. We will revisit this topic and revisit Mr. Sanford’s quote in the future but for now begin the process, think through your investment/financial positions and challenge your conventional perceptions of risk…. for your own safety.

---The views expressed here are of the author, HUMMoney contributor Greg Lewin; currently a General Partner at TLF Capital, an investment management firm. During the past 26 years he has been a senior money manager or partner in Wall Street firms including Neuberger Berman, Charter Oak Partn﻿ers and Sailfish Capital.

The hardest thing in the world is to do nothing. And I’m not talking about lazy “do nothing.” I’m talking about pain stacking, heart aching, agonizing “do nothing.”

The sounds of the stock market’s call to action begin resonating early in the morning on CNBC. When things may be a little glum the machine churns into action, bringing out tried and true pundits such as Warren Buffet, assorted Federal Reserve officials, academics from our best universities and various self proclaimed all-star managers to impart their own versions of clarity, certainty and wisdom.

And who are we to offer a challenge? Sure you’ve read the stories of federal debt, state and local government defaults, unemployment, the failing social safety net, European country failures, food inflation, soaring oil prices, Arab riots, and the odd natural disaster, but of course you don’t have the resources of our celebrities.

How can they be wrong? They own businesses, they travel the world, they confer with the world’s great leaders and they even at times advise and assist our own government officials. They are the elite and we are simply players. They have insight and we are merely observers. So when consumers are urged to consume and investors are urged to invest we ultimately relent and often times become encouraged by our short term victories, and ultimately join forces with our more illustrious peers and take comfort and gain confidence in our association. Worst of all, we dismiss our fundamental observations as impediments rather than our own point of view.

One of the phrases that has always troubled me more than most is “respect the market.” This is referring to the notion that the market’s behavior is somehow informed by some enormous collective wisdom.

So when the Tokyo market tumbles 10% on generational problems, and the next day world governments collude to inject billions of dollars to effectively create stock market demand and the market goes back up, what should we learn? Are the markets geared to inform or possibly to misinform?

When world economic policy collaborates to manufacture low interest rates in combination with an abundant supply of risk capital at the simple expense of mountains of (what amounts to) low interest variable rate debt, should we choose to argue and stand in the way of short term profitable behavior? Or might we use our own simple powers of observation to recollect that we have been down this road before?

We even seem incapable of learning from our most recent misfortune. Can anyone remotely detect investor behavior and leading economic thinkers advice that is reminiscent of the most recent housing crisis? Do you remember mountains of adjustable rate debt, rising prices attracting rising investor interest, rising market prices reinforcing risk taking behavior and collections of experts removing any sense of doubt?

In fact, these are virtually the same set of experts that proved so reliable in our last meeting with financial death.

So again, please tell me, exactly what were the markets informing the investment public of and how much respect did they really deserve?

To quote Rudyard Kipling from his wonderful poem “If”:

If you can keep your head when all about you

Are losing theirs and blaming it on you;

If you can trust yourself when all men doubt you,

But make allowance for their doubting too;

If you can wait and not be tired by waiting,

Or being lied about, don’t deal in lies,

So the question remains, can you be open and adaptable to new information but be true to your own compass and possibly do nothing when all those about you may appear to be profiting, yet from your vantage point, are losing their heads?

For if you can do the hardest thing, somewhat apart from that which is widely encouraged, as the poem concludes:

Yours is the Earth and everything that’s in it,

And – which is more – you’ll be a Man, my son!

Well, I might have gotten a little carried away, but hopefully you get the point.

--The views expressed here are of the author, HUMMoney contributor Greg Lewin; currently a General Partner at TLF Capital, an investment management firm. During the past 26 years he has been a senior money manager or partner in Wall Street firms including Neuberger Berman, Charter Oak Partn﻿ers and Sailfish Capital.

In the aftermath of the 2007 – 2009 market’s decline, many have searched for the pearl, the insight that defines the essence of the problem and thus better illuminates the path forward. For me that jewel came from a single interview with a senior statesman of the capital markets, Seth Glickenhaus. When questioned about the difference between the current crisis and that of the 1930’s (in which he was a young man) his reply was simple. “In the 20’s people looked at themselves to ask what they did wrong. Now people look at others to blame for their misfortune.”

This point was most beautifully reinforced in a Thomas L. Friedman article where he reprinted a letter written by a friend from the military, Mark Mykleby. Mr. Mykleby wrote, “I’d like to join in on the blame game that has come to define our national approach to the ongoing environmental crises in the Gulf of Mexico. This isn’t BP’s or Transocean’s fault. It’s not the government’s fault. It’s my fault. I’m the one to blame and I’m sorry. It’s my fault because I haven’t digested the world’s in-your-face hints that maybe I ought to think about the future and change the unsustainable way I live my life…”

Read this again. This is the answer, for the larger questions of the world and the more manageable affairs of the individual investor. Take responsibility, make a sober assessment and plot a long-term course for repair and prosperity. The problem with the entire financial complex built to service the individual investor is that 99% of the time they have virtually none of the specific information necessary to craft a program appropriate for you. Their opinions and advice are framed in the business and political agendas of their own circumstance. Your only chance is to dispatch with it all and take responsibility for yourself.

Here is a simple tool to help you take responsibility for managing your own financial affairs. Get a note book and on the top of each page list each important financial asset. These should be assets that you own strictly for financial purposes. For example, a house may be owned for purposes beyond financial gain. The list could include mutual funds, individual stocks and bonds, etc. For each of these assets list 5 reasons you own them, for example, research, recommendations, television. Be honest and be clear. Now callously evaluate those reasons. First, are they sufficient to invest your precious capital? If no, seriously consider selling that asset because it is not advisable to figure out answers when capital is at risk. If they are sufficient, make sure those 5 reasons are clear, current and complete. Because this notebook should be reviewed periodically and when those reasons either come into question or are no longer correct, a change in your position should be immediately considered. If you can maintain this discipline consistently for all your financial positions your error rate should be reduced and returns should improve.

Be an active participant in all financial decisions, take responsibility for all outcomes and don’t fail to act with discipline. Every financial decision should probably have 5 or so clear cut reasons why you engaged and if those reasons are in question, action should be taken before a new decision is at hand with its own 5 point plan of action.

---The views expressed here are of the author, HUMMoney contributor Greg Lewin; currently a General Partner at TLF Capital, an investment management firm. During the past 26 years he has been a senior money manager or partner in Wall Street firms including Neuberger Berman, Charter Oak Partn﻿ers and Sailfish Capital.

A recent article published in the Financial Times titled “Decoding the Psychology of Trading” analyzed the strategies employed by systematic or computer based investment firms. The 2 core premises on which they began to develop formulas by which their systems operated were:

- Investors are irrational.

- The financial industry will quickly jump on any new trend.

Interestingly, a recent article in Businessweek discusses the recent transition of leadership to a currency trader at one of the largest and most successful hedge funds in the world. To paraphrase his operating strategy: value in currency trading is not absolute, it is relative, and that is why we are very attentive to markets and we respond to change in market behavior aggressively.

So if the presumption of those who know is that investors are irrational and the strategy of the best and brightest is to transition from absolute value (fundamental behavior) to relative value (trading behavior based on market behavior), then investment outcomes can be expected to be increasingly unpredictable.

This may be why our investing environment has become so hard to understand. Sophisticated capital intentionally following the trends established by irrational behavior. It should also be assumed that when powerful institutions such as this hedge fund change, they are not alone and where they lead large pools of money follow, further exacerbating the trend.

It is most important to understand the realities in the marketplace and to adapt. Importantly, adapt does not necessarily mean change your strategies. We have been advocates of fundamental investing suited to your needs, resources and interests. Current market realities may require a change in expectations, timeframes and possibly risk tolerance to account for the new levels of volatility in the stock market. The key is to be aware of the environment, think through the change and adjust accordingly. You don’t have to follow a trend, especially one predicated on dubious grounds.

---The views expressed here are of the author, HUMMoney contributor Greg Lewin; currently a General Partner at TLF Capital, an investment management firm. During the past 26 years he has been a senior money manager or partner in Wall Street firms including Neuberger Berman, Charter Oak Partners and Sailfish Capital.